Every organization must manage its finances through a bank account. Even when the organization does not sell through credit cards or bank standing orders, then it is not charged clearing fees but still pays fees to the banks.
Bank Commissions
Bank fees refer to all operations related to cash register management, i.e., depositing checks, cash, and other means of payment, issuing a deposited check to return it to the customer, check return fees, etc.
From an accounting point of view, there is a difference between the various fees, some of them are intended to finance operational operations of the bank (such as a deposit) and are located in the banking expenses section of the profit and loss statement; another part of the fees, such as check discounting fees, actually constitutes interest on the advance payment from the debtor and therefore they are recorded In the profit and loss statement in interest expenses.
Clearing fees
The clearing fees refer to the fees paid to banks and payment processing companies for bank standing orders or standing orders using credit or debit cards, as well as fees for all other transactions carried out with credit cards.
In some large organizations, these fees are classified under the selling expenses section of the organization and not under the financing expenses section. We do not take a position here regarding the position of the section in terms of the accepted accounting rules – but for the purpose of calculating the total collection costs only, we decided to include these costs as part of the collection costs.
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